Debt Rattle December 16 2015

[Raúl Ilargi Meijer]

DPC Elephants in Luna Park promenade, Coney Island 1905 • Fed Weighs Merits Of Jumbo Portfolio In Post-Crisis Era (Reuters) • This Is a Test of the Sh
[See the full post at: Debt Rattle December 16 2015]

[Dr. Diablo]

Real science, and how difficult and error-prone it is:
https://www.washingtonpost.com/news/energy-environment/wp/2015/12/11/scientists-may-have-just-solved-one-of-the-most-troubling-mysteries-about-sea-level-rise/

The number of factors you have to account for, that cannot be accurate modeled or measured is staggering. Yet the slightest adjustment to any of 5 planet-sized calculations will lead to an error calculated in millimeters–over a timescale before anyone was measuring. If you like puzzles, here it is.

[rapier]

From the Reuters story; “The prevailing view is that the U.S. central bank’s $4.5 trillion portfolio, vastly expanded by bond purchases aimed at stimulating the economy, will have to shrink once rates are on their way up,” has it backwards.

In order to raise rates the Fed may well have to shrink its balance sheet. It might be able to effect the quarter point raise in the Fed Funds rate without it simply by their sacred words and the assistance of their partners the banking giants.

The Fed will probably never sell out of its holdings. In all likelihood they will be adding to them soon enough.

While everyone was obsessed with the possible Fed Funds rate hike, which by the way is barely used anymore since the banks have $2.5Tn in ‘excess’ reserves, other short term rates have been rising already.
https://wallstreetexaminer.com/wp-content/uploads/2015/12/Capture-2.png

And then don’t forget the Brazils of the world or the frackers who simply can’t borrow anymore.

[Author]

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